Fed Needs to Outline Plan to Fight Next Downturn, Economists Say

The suite of new monetary policy tools under consideration by the Federal Reserve are likely to have limited effectiveness in the next downturn, economists wrote in a keynote paper for a University of Chicago Booth School of Business monetary policy forum that will host several central bankers in New York Friday.

“Going forward, low global bond yields likely will hamper any attempt to lower safe interest rates using either old or new monetary policy tools,” economists Stephen Cecchetti, Michael Feroli, Anil Kashyap, Catherine Mann and Kermit Schoenholtz wrote in the paper.